When Will Tuniu Corporation (NASDAQ:TOUR) Turn A Profit?
With the business potentially at an important milestone, we thought we'd take a closer look at Tuniu Corporation's (NASDAQ:TOUR) future prospects. Tuniu Corporation operates as an online leisure travel company in China. With the latest financial year loss of CN¥193m and a trailing-twelve-month loss of CN¥33m, the US$145m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Tuniu's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Tuniu
Tuniu is bordering on breakeven, according to some American Hospitality analysts. They expect the company to post a final loss in 2023, before turning a profit of CN¥6.9m in 2024. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 129% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Tuniu's growth isn’t the focus of this broad overview, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.7% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Tuniu to cover in one brief article, but the key fundamentals for the company can all be found in one place – Tuniu's company page on Simply Wall St. We've also compiled a list of key aspects you should further research:
Historical Track Record: What has Tuniu's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tuniu's board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
